UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF1934
For the fiscal period ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number: 333-102569
INTERSTAR SECURITISATION MANAGEMENT PTY LIMITED
in its capacity as manager of the Interstar Millennium Series 2003-1G Trust
ABN 63 677 365 486
--------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
VICTORIA, AUSTRALIA
-------------------------------------------------
(State or Other Jurisdiction of Incorporation)
N/A
-------------------------------------------------
(I.R.S. Employer Identification No.)
LEVEL 10, 101 COLLINS STREET, MELBOURNE, VICTORIA, 3000, AUSTRALIA
--------------------------------------------------------------------
(Address of principal executive offices)
(0011) 613 9612 1111
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the last 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act rule 12b-2). Yes [ ] No [X]
State the aggregate market value of the voting and non-voting common equity held
by nonaffiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter. NOT APPLICABLE
TABLE OF CONTENTS
PART 1......................................................................................................4
ITEM 1. BUSINESS.......................................................................................4
ITEM 2. PROPERTIES.....................................................................................4
ITEM 3. LEGAL PROCEEDINGS..............................................................................4
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................4
PART II.....................................................................................................4
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES..............................................4
ITEM 6. SELECTED FINANCIAL DATA........................................................................5
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........5
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....................................5
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....................................................6
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.......................................................................6
PART III....................................................................................................7
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.............................................7
ITEM 11. EXECUTIVE COMPENSATION.........................................................................7
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS................................................................7
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................7
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.........................................................7
PART IV.....................................................................................................8
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 6-K...............................8
2
INTRODUCTORY NOTE
The information required for some items in Form 10-K is "not applicable" to the
Trust or the Manager. As used in this Annual Report filed on Form 10-K, "not
applicable" or "Not Applicable" means that the response to the referenced item
is omitted in reliance on the procedures outlined in numerous no-action letters
issued by the Commission's Staff with respect to substantially similar
securities and trusts that file annual reports on Form 10-K.
3
PART I
ITEM 1. BUSINESS
This Annual Report on Form 10-K relates to the Interstar Millennium Series
2003-1G Trust (the "Trust") and the Class A2 and Class B1 Mortgage Backed
Floating Rate Notes (the "Notes") issued pursuant to the Note Trust Deed dated
as of February 26, 2003 (the "Note Trust Deed"), between Perpetual Trustees
Victoria Limited, the issuer trustee (the "Issuer Trustee"); Interstar
Securitisation Management Pty Ltd (the "Manager"), as Manager; and The Bank of
New York, as note trustee (the "Note Trustee"). Capitalised terms used in this
Form 10-K and not defined have the same meanings given to them in the Prospectus
and Series Notice relating to the Notes.
The only business of the Trust is the collection and distribution of payments on
the residential mortgage loans in the manner described in the Registration
Statement on Form S-11 (File No. 333-102569) (the "Registration Statement").
Accordingly, there is no relevant information to report in response to Item 101
of Regulation S-K.
ITEM 2. PROPERTIES
The registrant and the Trust do not own any physical properties. Information
regarding the mortgage loans is furnished under Item 15 - Exhibit 99.2.
ITEM 3. LEGAL PROCEEDINGS
The Manager knows of no material legal proceedings involving any of the Trust,
the Manager, the Servicer or the Issuer Trustee.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No votes or consents of Noteholders were solicited during the fiscal year for
any purpose.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The Notes are not traded on any nationally recognized exchange in the United
States.
The Notes are currently represented by certificates registered in the name of
Cede & Co., the nominee of The Depository Trust Company ("DTC"). Accordingly,
Cede & Co. is the sole holder of record of the Notes, which it holds on behalf
of brokers, dealers, banks and other direct participants in the DTC system.
The trust pays no dividends with respect to the Notes, the information required
by Item 201(c) of Regulation S-K regarding dividends is inapplicable to the
Trust. See Exhibit 99.1 for information with respect to distributions to
Noteholders.
4
ITEM 6. SELECTED FINANCIAL DATA
The Manager incorporates by reference its Noteholders Reports, filed as periodic
filings on Form 6-K, in respect of the Trust under Central Index Key 0001174852
which contain all financial information related to the Trust relevant to the
holders of the Notes (the "Noteholders"), pursuant to rule 12b-23 promulgated
under the Securities Exchange Act of 1934.
The Manager globally incorporates by reference and attaches hereto as Exhibit
13.1, pursuant to Rules 12b-23 promulgated under the Securities Exchange Act of
1934, the following quarterly Noteholders Report (the "Noteholders Report"), for
the quarterly Payment Dates in August 2003 and November 2003 filed on Form 6-K
in respect of the Trust under Central Index Key 0001174852, which include all
financial information relating to the Trust that is relevant to Noteholders.
o Noteholders Report for the August 27, 2003 Payment Date
o Noteholders Report for the November 28, 2003 Payment Date
The Manager also attaches hereto, as Exhibit 99.1 the following document:
o Aggregate Totals for the period July 1, 2003 to December 31, 2003.
The foregoing presents all relevant financial information relating to the Trust.
Because of the limited business activity of the Trust, the Selected Financial
Data in Item 301 of Regulation S-K would not provide any meaningful additional
information.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Because of the limited business activity of the Trust, the presentation of
Management's Discussion and Analysis of Financial Condition and Results of
Operations, as otherwise would be required by Item 303 of Regulation S-K, would
not be meaningful. All relevant information is contained in the quarterly
servicing reports (filed under Current Reports on Form 6-K) as described above.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Currency Exchange Control Risk
- ------------------------------
Interest and principal payments to holders of the Notes are paid in United
States dollars ("U.S. dollars"). However payments on the mortgage loans (the
"Collections") are received by the Issuer Trustee, in Australian dollars, in
Australia. Pursuant to certain swap agreements ("Currency Swaps"), the Issuer
Trustee is required to pay a portion of the Collections to certain swap
counterparties (the "Currency Swap Providers") who in turn pay ("Swap Currency
Exchange"), at the direction of the Issuer Trustee, U.S. dollars to the holders
of the Notes. It is possible that in the future, Australia may impose exchange
controls that affect the availability of Australian dollar payments for making
payments under the Currency Swaps. The holders of the Notes will bear the risk
of the imposition of foreign exchange controls by the Australian government that
impact upon the Issuer Trustee's ability to exchange the Collections for U.S.
dollars.
The Issuer Trustee has no control over such risk, which will generally be
affected by economic and political events in Australia. If the Issuer Trustee
does not pay some or all of the amount in Australian dollars which it is
required to pay the Currency Swap Providers under the Currency Swaps, the
Currency Swap Providers are only required to pay the U.S. dollar equivalent of
the amounts they actually receive. In such event, it is unlikely that the Trust
would have sufficient U.S. dollars to make the payments due on the Notes.
5
The specific prior approval of the Reserve Bank of Australia or the Minister for
Foreign Affairs of the Commonwealth of Australia must be obtained for certain
transactions involving or connected with individuals or entities listed in the
relevant Commonwealth Government Gazette as persons or entities identified with
terrorism or to which financial sanctions apply, including:
o certain Yugoslav entities or individuals;
o Jemaah Islamiah;
o the Government of Zimbabwe, any public authority or controlled entity of
the Government of Zimbabwe and certain other individuals identified by the
Reserve Bank of Australia;
o the Taliban (also known as the Islamic Emirate of Afghanistan) or any
undertaking owned or controlled, directly or indirectly, by the Taliban;
o Osama bin Laden, the Al-Qaeda organization and certain other individuals
identified by the Reserve Bank of Australia as being linked to terrorism;
and
o the persons whose names are published in the Commonwealth Government
Gazette Gn42 as amended by Commonwealth Government Gazette Gn37 and
Commonwealth Government Gazette Gn49, and the persons whose names are
listed under the Suppression of the Financing of Terrorism Act 2002
(Commonwealth).
Currency Exchange Rate Risk
- ----------------------------
Interest and principal on the Notes are payable in U.S. dollars and the Trust's
primary source for funding its payments on the Notes is its Collections on the
mortgage loans, which will be sourced in Australian dollars. If the Currency
Swap Providers were to fail to perform under the Currency Swaps or were to be
discharged from such performance because of a default thereunder by the Trust,
the Trust might have to exchange its Australian dollars for U.S. dollars at an
exchange rate that is less favorable to the Trust than when the Currency Swaps
were entered into and might therefore not have sufficient U.S. dollars to make
timely payments on the Notes, even though the delinquency and loss experience on
the mortgage loans may be acceptable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
As discussed above, furnishing the financial information required by Item 8 of
Form 10-K would not add any relevant information to that provided by the
foregoing statements. Because the Notes are essentially "pass-through"
securities, the Trust will have "income" only in the limited sense of collecting
payments on the mortgage loans. The only material items of "expense" for the
Trust will be the amounts paid as servicing compensation, and coupon interest to
investors. The quarterly Noteholder reports (filed on Form 6-K) disclose the
amounts of "income" and "expenses" of the Trust.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
As noted in Item 13, on September 29, 2003 the parent entity of the Servicer and
Trust Manager were acquired (100%) by Challenger Financial Services Group
Limited (ultimate parent entity). On November 7, 2003, the Audit and Compliance
Committee of Challenger Financial Services Group Limited appointed Ernst & Young
Chartered Accountants ("Ernst & Young") as the Challenger Group auditor. As a
direct consequence, Ernst & Young were also appointed auditor of the Interstar
Millennium Trusts. As a result of the Group-wide appointment of Ernst & Young,
KPMG Chartered Accountants ("KPMG"), the Trust's former auditor, resigned. The
resignation of KPMG and subsequent appointment of Ernst & Young, based on the
above noted grounds, was accepted by the Trustee (Perpetual Trustees Victoria
Limited) of the Interstar Millennium Trusts.
There were no disagreements on accounting disclosures.
6
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Trust has no directors or executive officers. Therefore, this item is not
applicable.
ITEM 11. EXECUTIVE COMPENSATION
The Trust has no directors or executive officers. Therefore, this item is not
applicable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
All of the Noteholders maintained their security positions with DTC. While
some of the Noteholders' security positions in the Trust may exceed 5% of the
outstanding amount of the Notes, such Notes do not constitute voting securities
within the meaning of Item 403 of Regulation S-K.
As at the date of this report, none of the officers or directors of the
Registrant owns a beneficial interest in either the Trust, or in the Registrant.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Interstar Securitisation Management Pty Ltd is a wholly owned subsidiary of
Interstar Securities (Australia) Pty Ltd. Its principal business activity is the
management of securitisation trusts established under the Interstar Millennium
Trust Programmes.
Interstar Securities (Australia) Pty Ltd acts as servicer (the "Servicer") to
the Trust. The servicer receives a servicer fee direct from the Trust.
The Servicer is a wholly owned direct subsidiary of Interstar Securities
Holdings Pty Limited ("Interstar Holdings"). All shares in Interstar Holdings
are ultimately owned (effective September 29, 2003) by Challenger Financial
Services Group Limited, a public company listed on the Australian Stock
Exchange.
The Manager has entered into an arrangement with the Servicer, whereby the
Servicer provides services and various facilities to the Trust Manager on
commercial terms, in order for the Manager to carry out its functions as manager
under the securitization trusts. Interstar Securitisation Management Pty Ltd
pays management fees to the Servicer.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Asset-Backed Issuers are not required to disclose the information required by
this item.
7
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 6-K
(a) (1) and (2):
Incorporated herein as Exhibit 99.1 are the aggregate totals of the quarterly
Noteholder Reports to the Trust for the 6 months ended December 31, 2003. A copy
of the Officer's Certificate of Compliance is attached hereto as Exhibit No.
99.3.
(a) (3) EXHIBITS:
- ------------------------- --------------------------------------------------- -----------------------
Designation Description Method of Filing
- ------------------------- --------------------------------------------------- -----------------------
Exhibit 13.1 Noteholders Reports for the August 27, 2003 and 13.1
the November 28, 2003 Payment Dates
Exhibit 31.1 Section 302 Certification 31.1
Exhibit 99.1 Aggregate Totals for the period July 1, 2003 to 99.1
December 31, 2003
Exhibit 99.2 Independent Auditor's Annual Servicer Compliance 99.2
Certificate
Exhibit 99.3 Officer's Certificate of Compliance 99.3
Exhibit 99.4 Servicer's Certificate of Compliance 99.4
- ------------------------- --------------------------------------------------- -----------------------
(b) FOR THE AUGUST 27, 2003 PAYMENT DATE A REPORT ON FORM 6-K WAS FILED BY THE
REGISTRANT IN ORDER TO PROVIDE THE STATEMENTS FOR QUARTERLY DISTRIBUTIONS
TO THE NOTEHOLDER.
FOR THE NOVEMBER 28, 2003 PAYMENT DATE A REPORT ON FORM 6-K WAS FILED BY
THE REGISTRANT IN ORDER TO PROVIDE THE STATEMENTS FOR QUARTERLY
DISTRIBUTIONS TO THE NOTEHOLDERS.
ON SEPTEMBER 18, 2003 A REPORT ON FORM 6-K WAS FILED BY THE REGISTRANT IN
ORDER TO PROVIDE NOTICE OF THE ACQUISITION OF THE TRUST MANAGER AND
SERVICER BY CHALLENGER FINANCIAL SERVICES LIMITED.
NO OTHER REPORTS ON FORM 6-K HAVE BEEN FILED DURING THE LAST SIX MONTHS
(TRANSITIONAL PERIOD) COVERED BY THIS REPORT.
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
INTERSTAR SECURITISATION MANAGEMENT PTY LIMITED
/S/ SAM KYRIACOU
- -----------------------
Name: Sam Kyriacou
Title: Director
Date: October 13, 2004
9
INDEX TO EXHIBITS
EXHIBIT NO. DOCUMENT DESCRIPTION
- ------------ -------------------------------------------------------------------
13.1 Noteholders Reports for the August 27, 2003 and the November 28,
2003 Payment Dates
31.1 Section 302 Certification
99.1 Aggregate Totals for the Period July 1, 2003 to December 31, 2003
99.2 Independent Auditor's Annual Servicer Compliance Certificate
99.3 Officer's Certificate of Compliance
99.4 Servicer's Certificate of Compliance
10